Against the backdrop of current global economic uncertainty, every policy move by the Federal Reserve has stirred the nerves of the world. On November 7 local time, the Federal Reserve announced a 25 basis point cut in the federal funds rate to 4.5%-4.75%. This is another significant measure following the 50 basis point cut on September 18, marking the Federal Reserve's determination to maintain the steady progress of the U.S. economy through tangible actions, the second such action since March 2020.

Powell Reiterates Trump's Election Will Not Affect Monetary Policy

In his speech following this decision, Federal Reserve Chairman Powell clearly stated that the outcome of the presidential election will not directly affect monetary policy in the short term. He emphasized that the Federal Reserve's policy adjustments will be entirely based on the actual economic and inflation conditions, remaining flexible and without a preset course. Powell candidly said that if the economy remains strong and inflation does not fall back to 2%, they will consider adjusting policy more slowly; conversely, if the labor market weakens or inflation declines faster than expected, they may accelerate actions.

Trump's Election Has Not Yet Affected the Fed's Rate Cut Pace

Although Powell's statement aims to clarify the boundaries between politics and monetary policy, concerns in the market about potential political interference have not completely dissipated. After Trump announced his election as president for 2024, market analysts pointed out that his policy proposals, such as tax cuts, immigration restrictions, and increased tariffs, could put greater pressure on inflation and may force the Federal Reserve to adjust monetary policy when inflation rises.